Article
2025 clean fuel production tax credit registration deadline approaches
June 20, 2024 · Authored by Craig Lammlin, Colin Quill, MaryCaitlin Willcuts
Qualified taxpayers may be eligible for the clean fuel production tax credit beginning Jan. 1, 2025, through Dec. 31, 2027, available under the Inflation Reduction Act. The registration deadline for approval is Jan. 1, 2025.
Taxpayers looking to claim the clean fuel production tax credit (PTC) for activity starting on Jan. 1, 2025, should apply for their registration letter by July 15, 2024. In IRS Notice 2024-49, the IRS indicates it intends to process applications submitted before July 15, 2024, and encourages taxpayers to apply as soon as possible to be eligible to earn the credit starting Jan. 1, 2025. Learn more about how to qualify for the PTC and the registration parameters your organization may need to consider.
Registering as a producer for the clean fuel production tax credit
Taxpayers with qualified facilities that produce and sell to unrelated parties — either sustainable aviation fuel (SAF) for aircraft or non-sustainable aviation fuel (non-SAF) for highway vehicles — that emit 50 kilograms or less of carbon dioxide per one million BTU, may be eligible for a PTC under Section 45Z of the Internal Revenue Code.
The Section 45Z PTC is a federal income tax credit that may be worth $0.20 per gallon for most transportation fuels or $0.35 per gallon for sustainable aviation fuel, or more, if the IRS determines that the amount of credit may be enhanced by negative emissions factors for the fuel. Taxpayers who meet the specified wage level and apprenticeship program requirements for certain activities may generate up to five times the amount of credit.
Eligible production must occur after Dec. 31, 2024, and before Jan. 1, 2028. Not all non-SAF fuel types are expected to be eligible. Low-greenhouse gas (GHG) fuels are expected to qualify if they meet the emission requirements, such as:
- Biodiesel
- Ethanol
- Diesel
- Butanol
- Dimethyl ether
- Gasoline
- Hydrogen
- Liquified petroleum gas
- Methanol
Transferability survives new tax legislation
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.